JP Morgan Chase & Co (JPM)

The best-run bank in the world. If you believe in the U.S. economy, this stock will ride it. Rising interest rates are a tailwind. Earnings are growing rapidly, faster than Canadian banks. The stock has pulled back, so it's a great opportunity. (Analysts' price target: $120.17)

(Past Top Pick, July 17, 2017, Up 8%) He simply did a covered call from December, bought at $92.25, sold a $97.50 call for which he got $2.20.

A play on the US economy, consumer. Get about 80% of their business comes from the US. Well positioned to grow business as the economy is recovering. Going forward, they’re going to grow market share. They’ll benefit from tax reform, they have the cash and the technology. Yield is about 2%. They should be in a position to raise the dividend or repurchase stock with the review at the end of June. At 12-13x forward earnings, it’s attractive. (Analysts’ price target is $ 121.36)

The American consumer is releveraging, which is positive for the banks. Their net interest margin should go up with rising interest rates. They are spending significantly on technology, which will allow them to grow at a far lower cost than expanding their bricks and mortar. They will spend less to capture more customers. Additionally, regulation on US banks is coming off a bit, which will help their profits. They are trading at cheap multiples compared to other financial service companies. (Analysts’ price target is $121.52)

BAC or JPM? You'll do well with either. BAC is more focused on the US economy; JPM is more sensitive to capital markets. He owns both and would buy both today. Both will raise dividends. Exposure to an improving U.S. economy is a tailwind.

(A Past Top Pick on Aug. 30, 2017, Up 21%) Curious why it's done poorly lately. Maybe there was too much run-up with the U.S. tax changes. Their recent earnings beat expectations, but the 3% yield curve pressures their margins. Still worth owning.

Likes U.S. financials a lot. Good earnings last year. It's a smart play on rising interest rates. They have a great CEO who believes the US consumer and economy are healthy. Its valuation is at 12x earnings and boasts better earnings growth than Canadian banks. He sees this hitting $150.

She sold Wells Fargo and bought this in February. It's a good play on the U.S. economy, well-run and reasonably valued. The U.S. economy will continue to imrpove.

He likes a couple of ETFs. KRE-N is regional banks and has broken out already. While revenues go up revenues should increase for banks but the profit margin is worse if the yield curve is flattening. There is a momentum trade on US banks right now, however. The yield curve could flatten further later this year.

It is in good shape fundamentally with a PE around 13. We have not broken down below its channel.

JP Morgan (JPM-N) vs Bank of America (BAC-N) – He holds both of these companies. JP Morgan (JPM-N) is a preferred holding for him as its earnings are less volatile of the two. Bank of America (BAC-N) is second on his list, which carries a large amount of “free balances” (client deposits they pay no interest on), which is very interest rate sensitive.

He thinks they are the best positioned financial institution and is well diversified. The can perform many types of lending and loans. It has a large presence in Europe and is very competitive. He prefers them over European banks. Yield 1.9%. (Analysts’ price target is $120.08 )

As the heart of the pro-growth theme. He likes the banking sector in the US. Earnings for this company are fantastic. Good boring name. (Analysts’ price target is $119.98)

Strong in investment banking, trading and primarily retail banking. Like Bank of America, they will be returning capital to shareholders through buybacks. Will benefit from rising interest rates. (Analysts' price target is $119.98.)

This is a well-managed, large US bank that is well-valued at this level. They expect it to grow with the rapid (3%) growth of the US economy. She thinks they can grow its market share. (Analysts' price target is 119.98$).